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Tilera, an MIT spinoff in San Jose, CA, that makes chips with 64 separate processors (or cores) for special applications such as networking and digital video, has raised $45 million in its fourth, and presumably last, round of venture funding. The only survivor among a small group of multi-core chipmakers founded in 2003 and 2004, Tilera is exploring new applications for its high-throughput, low-power chips, such as the data centers being built across the country by vendors of cloud-based services.

The seven-year-old startup, whose largest development center is in Westborough, MA, is approaching profitability and didn’t set out to raise $45 million, according to Troy Bailey, vice president of marketing. But “we found a lot of enthusiasm and were quickly oversubscribed,” Bailey says. The big round—which brings Tilera’s total venture backing to $109 million—will be useful as the company markets a new server intended for data centers and launches its next-generation products, chips with 100 and, later, 225 cores, he says.

The financing round brought together a large group of new and existing investors. Artis Capital Management, a secretive hedge fund based in San Francisco that invests mainly in semiconductor, networking, and wireless firms, was in the lead. New investors WestSummit Capital Management and Comerica Bank joined in, as did existing investors Walden International, Bessemer Venture Partners, and Columbia Capital. Tilera’s existing existing group of strategic investor—Broadcom Corporation, NTT Finance, VentureTech Alliance, and Quanta Computer—was joined by Cisco Systems and Samsung Venture Investment.

Anant Agarwal, an associate director of MIT’s Computers Science and Artificial Intelligence Laboratory (CSAIL), co-founded Tilera in 2004 with a vision for multi-core chips featuring a unique on-chip network that would fix communications bottlenecks that make it so hard to spread computational work across multiple processors. The company came out of stealth mode in late 2007—Xconomy covered its debut here—and has found customers in hardware areas like multimedia network routers, wireless network infrastructure, and videoconferencing where there’s a premium on data throughput.

Now Tilera is pitching its 64-core chips as a faster, more energy-efficient replacement for the mostly Intel-based servers in the giant data centers at the heart of the cloud computing model. “We are literally an Intel replacement in the data center,” says Bailey. Working with Quanta Computer, a Taiwan-based manufacturer known mainly for building notebook computers, Tilera last summer introduced an enterprise server containing eight of Tilera’s 64-core chips, for 512 processors in total. A single “S2Q” server is meant to replace eight Intel Xeon-based servers and use half as much power. (Tilera’s multicore processors use less electricity than Intel devices with fewer cores because … Next Page »